Hoover Daily Report

Political Diary: Cautioning California’s Liberals

via Wall Street Journal
Tuesday, October 1, 2013

The conventional wisdom in California is that Democratic Gov. Jerry Brown is a shoo-in for re-election, and maybe so. The state's economy has improved since he was elected in 2010, and the GOP's bench of potential candidates consists of unknown third-stringers. But Democrats shouldn't rest easy.

Mr. Brown, whose approval rating sits just below 50% according to a September Public Policy Institute of California poll, will likely have to draw high numbers of minorities, union members and young people to the polls next November to maintain the party's tenuous legislative supermajority. A switch of a couple of seats in both chambers could give Republicans the ability to block tax hikes and Democrats' ability to place constitutional amendments on the ballot.

Democrats have benefitted in the last two elections from polarizing Republican top-of-the-ticket candidates and ballot measures, which have driven liberal turnout. However, union coffers won't be as flush next year due to their high-rolling campaigns to defeat GOP gubernatorial candidate Meg Whitman in 2010 and kill a ballot measure last year that would have restricted their ability to spend members' dues on politics.

Meanwhile, a majority of California voters still believe their state is heading in the wrong direction, while a plurality say that the next year will be financially tough. Californians' outlook has improved since last September, when nearly two-thirds of voters expressed pessimism. Yet their sunnier disposition is partly due to California's housing rebound. As interest rates and inventories increase, real estate prices are beginning to level off.

A new Hoover Institution Golden State poll also suggests a couple of other reasons for liberal caution: one-third of Californians report being worse-off financially than they were a year ago, while just 17% say they're doing better. Meanwhile, three-quarters expect taxes to increase in the next three years, which suggests that voters don't have much faith in the governor's ability to restrain his legislative super-majority.

Democrats are unlikely to raise taxes next year because they could face a blowback at the polls. So they may instead try to increase taxes discreetly by placing a measure on next November's ballot reducing the threshold for passing local parcel taxes. Or they might eliminate the 2017 sunset on last year's tax hike. Another option: stick a tax increase on the 2016 ballot that would be popular among a liberal electorate (e.g. an oil extraction tax) and wouldn't kick in until 2017.

Democrats realize their supermajority is tenuous, so they're likely to spend the next year exercising their maximum power with minimum accountability.